Intel Announces New Round of Layoffs in Data Center Division, Continuing Streamlining and Restructuring

On July 21, Intel (INTC-US) announced a new round of layoffs in its data center business unit, continuing the trend of large-scale streamlining over the past two years.

According to reports, Intel has notified employees in its data center division of upcoming job reductions, though the exact number of layoffs was not disclosed. In a statement, Intel said the restructuring is part of its overall strategy to "become a more focused and efficient company," ensuring the business has the "right positions and skill sets" in place, and will not affect product commitments or technology roadmaps.

The layoff announcement comes just before Intel is set to release its second-quarter earnings report. In the first quarter of this year, the data center business generated $5.1 billion in revenue, a 22% year-over-year increase. Meanwhile, Intel's stock price has surged from around $23 a year ago to approximately $99 in early trading this Monday, as investors express strong optimism about demand for AI chips and the expansion of its foundry business.

These layoffs occur amid a clear recovery in Intel's fundamentals. Investors expect that as AI systems take on more online tasks, demand for Intel's microprocessors will continue to grow. Additionally, the market widely anticipates that major tech companies, including Apple, will outsource chip manufacturing to Intel, providing new growth momentum for its manufacturing operations.

Intel's stock has risen over 300% in the past year, briefly surpassing $142 last month, though it has since pulled back. Despite this strong stock performance, management continues to push forward with organizational efficiency reforms.

CEO Pat Gelsinger has clearly stated that Intel needs to streamline its management layers to accelerate decision-making and bring new technologies to market faster.

The latest layoffs in the data center division are an extension of Intel's ongoing large-scale restructuring efforts. Since 2022, Intel's global workforce has decreased from approximately 132,000 to around 81,000, a reduction of nearly 40%.

Job reductions have been achieved through two main methods: the sale or spin-off of certain business units, and the direct elimination of tens of thousands of positions worldwide over the past two years.